The market value of Merton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the remaining term is less than 80 years
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in Merton,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Merton valuers.
In 2014 Finn, started to get near to the 80-year threshold with the lease on his purpose- built flat in Merton. In buying his flat two decades ago, the lease term was of no relevance. As luck would have it, he recognised he needed to take action soon on a lease extension. Finn arranged for a lease extension just under the wire last May. Finn and the landlord who owned the flat above eventually agreed on a premium of £5,000 . If he not met the deadline, the amount would have escalated by a minimum £850.
In 2009 we were called by Mr and Mrs. F Baker who, having completed a garden apartment in Merton in January 2005. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Identical properties in Merton with 100 year plus lease were worth £193,400. The mid-range ground rent payable was £65 collected per annum. The lease expired in 2084. Considering the 59 years remaining we calculated the premium to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of costs.
Dr O Mason took over the lease of a one bedroom flat in Merton in July 2001. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by an additional years. Comparative premises in Merton with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 billed per annum. The lease concluded on 12 September 2095. Having 70 years remaining we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.